Strategic ETF

Since their origin in the United States in 1993, Exchange-Traded Funds (ETF) have increasingly been used by institutional investors as a powerful portfolio management tool, providing broad diversification within specific market segments. ETF’s also offer other features, such as increased trading flexibility over mutual funds, more transparency, less volatility relative to the market and lower costs. Originally thought of as passive, index-like investment vehicles, ETF’s are increasingly being used in combination with active strategies in a core/satellite allocation approach.

Rockwood Capital, in combination with our sub-advisor Contravisory, offers a Sector ETF strategy that is an opportunistic, long-only equity strategy that employs an active investment approach utilizing Contravisory’s proprietary equity research methodology. The portfolio relies on the company’s 40+ years of sector analysis experience to construct a portfolio of S&P sector ETF’s tactically managed based upon an assessment of sector risk/reward opportunities.

Contravisory’s proprietary research has historically looked to identify and capitalize on positive global equity market themes by stock, sector, industry group, country, market cap, and/or emerging/developed trends. In the case of the Sector ETF strategy, focus is solely at the sector level. This process reveals early evidence of change from both a fundamental and investor sponsorship perspective, allowing the portfolio management team to assess global equity market opportunities. The purpose of the Sector ETF strategy is to serve as a core equity position, with a sector rotation approach enabling the portfolio management team to tactically adjust sector exposure to maximize alpha or value added and to manage downside risk.